Markets enter the week with a cautious bias, bracing for a politically sensitive backdrop as attention turns to key state election outcomes across Tamil Nadu, Kerala, West Bengal, Assam and Puducherry. While state elections typically carry less structural significance than national polls, they remain important in shaping perceptions around policy continuity, regional growth prospects and investor confidence.

Current market positioning suggests that a degree of continuity is already priced in. Should outcomes align with exit polls or broadly reflect stable governance, the market reaction is likely to be measured rather than directional.

From a trading perspective, the probability of a sharp surprise appears limited. The Nifty is expected to trade within a 1–1.5% range on either side, depending on how results compare with expectations. Upside triggers, however, may remain constrained unless outcomes materially diverge from consensus.

State elections are therefore likely to act more as a near-term sentiment catalyst than a driver of structural trend change. The broader market trajectory will continue to be dictated by global factors—particularly crude oil prices, currency movements and institutional flows.

Brent crude remains elevated in the $100–103 range after having sustained levels above $110 earlier, underpinned by persistent supply-side disruptions. The situation around the Strait of Hormuz, a critical global oil transit corridor, continues to embed a significant risk premium, keeping energy markets tight and prone to volatility.

Adding to this backdrop, comments from Donald Trump regarding potential U.S. involvement in escorting vessels through the Strait of Hormuz have introduced an additional layer of geopolitical uncertainty, keeping global markets on edge.

Foreign institutional investor (FII) flows remain a key variable. Continued outflows reflect elevated global risk aversion and ongoing pressure on emerging markets such as India, while any reversal could provide a meaningful stabilising impulse for domestic equities.

Overall, market sentiment remains fragile and heavily news-driven. Crude oil dynamics, geopolitical developments, currency trends and institutional flows will continue to shape near-term direction. A stabilisation in oil prices, alongside tangible progress in U.S.–Iran negotiations, will be critical for any sustained recovery in market confidence.

Technical View 

Nifty 50

Nifty 50 is currently trading with a cautious bias, hovering around the 24,000–24,100 zone. Price action reflects a lack of strong follow-through momentum. On the upside, 24,300–24,400 remains a crucial resistance band. A sustained move above this zone is required to strengthen bullish momentum and open the path for higher levels. On the downside, 23,800 stands as a key support. Holding this level is critical to maintain the current structure. Momentum indicators remain neutral, indicating the absence of strong trend strength. Overall, the outlook remains range-bound with a cautious bias, with meaningful upside only on a decisive breakout above resistance. 

Bank Nifty

Bank Nifty continues to trade on a weaker note, hovering near the 54,800–55,000 zone, reflecting sustained pressure in banking stocks. On the upside, 55,900–56,000 acts as immediate resistance, followed by the key 56,800–57,000 band. A sustained breakout above this zone is essential to regain bullish momentum toward 57,500–58,000 levels. On the downside, 54,500–54,400 serves as immediate support. A decisive breakdown below this range could extend weakness toward 54,000. Overall, the outlook remains cautious, and only sustained buying above resistance levels can trigger a meaningful recovery.